So it’s come to this: Unable to provide basic services for all of his constituents, Detroit mayor Dave Bing is drafting plans starve his city down to a manageable size. Using proprietary data and a survey released by Data Driven Detroit, Bing and his staff will pick “winners and losers” amongst the city’s neighborhoods and seek to resettle residents from the losers, those deemed most unlivable. With Detroit’s tax base withering from the implosion of two-thirds of the Big Three, the housing crisis, and an ongoing exodus, Bing believes he has no other choice.

“If we don’t do it, you know this whole city is going to go down,” he told a local radio station last month. “I’m hopeful people will understand that. If we can incentivize some of those folks that are in those desolate areas, they can get a better situation” in one of the remaining neighborhoods with schools and buses.

Can Detroit really shrink its way back to greatness (or at least stop the bleeding)? Part of the problem is that it’s been hollowing out for decades. A city of 1.85 million residents in 1950, Detroit had just 951,270 as of the last national census a decade ago, and the next–which is key to obtaining millions of dollars in federal funding–is expected to turn up only 800,000 this year. Some believe it might eventually slide to 700,000 before all is said and done. A quarter of the city is nothing more than vacant lots–40 square miles of “urban prairie.” Bing plans to shrink the occupied portions further by tearing down another 10,000 buildings. That should earn praise from economists like Harvard’s Ed Glaeser, who’s suggested similar policies for other Rust Belt cities. And what will Bing do with all of that empty space? Turn over as many as 10,000 acres to John Hantz to farm.

The owner of an eponymous financial services firm, Hantz is prepared to sink $30 million of his personal fortune into coaxing peaches, plums, lettuce, and heirloom tomatoes from the ground (or in hydroponic greenhouses). In exchange, all he’s asking for is free tax-delinquent land and tax breaks on agriculture. The city is considering giving him both. Hantz told Fortune he’s aiming for an average cost of $3,000 per acre, valuing it no differently than outlying farmland. But he also promises to create hundreds of green jobs, grow a surplus of fresh produce for residents, attract tourists, and “reintroduce Detroiters to the beauty of nature.”

Together, Bing’s and Hantz’s plans must sound like a model city for locavores, urban farmsteaders (although Detroit’s are actually suspicious of Hantz) and anyone concerned about the fate of sprawl in the era of peak oil. And that might have been so, were it not for the fact that Detroit doesn’t fall away to the real prairie at 8 Mile Road. The city of Detroit may be a shadow of its former self, but metropolitan “Detroit” and its suburbs still contain 4.4 million people, more than metropolitan Phoenix, San Francisco or Seattle. And while Detroit may be shrinking in area, “Detroit” is doing anything but.

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This fact, which is so often absent from reports about the city’s plight, fatally undermines Bing’s best intentions. His plan won’t make Detroit any denser, but the opposite. Or as The Baffler’s Will Boisvert makes the case:

“[As] rational as all this sounds, it hangs on a grotesque misunderstanding of Detroit’s predicament. Despite its ghost-town image, Detroit’s population density is still actually rather high by American standards. The city is half again as dense as Portland, Oregon, substantially denser than the booming Sunbelt cities of Phoenix, Houston, and Dallas, denser even than Pittsburgh–all of them places that adequately fund city services. Detroit’s problem is not underpopulation, but brute poverty, something that the grossly overstated efficiencies of shrinkage won’t alleviate … And for all its anti-sprawl rhetoric, shrinkism is extravagantly wasteful from the larger perspective of metropolitan land use. It hollows out the dense core of metro-area settlement under the assumption–the ugly, unstated postulate of shrinkage–that decent people can’t be enticed to live there. As city districts are razed and emptied, development is shunted, as usual, to cornfields on the exurban frontier, where people drive everywhere and nowhere–that’s the green part of the equation.”

This has always been the case with development in Detroit. In 1919, General Motors moved its headquarters two miles out of downtown to what became known as New Center. Ninety years later, it nearly repeated the feat after the neighboring suburb of Warren, home to its famed Technical Center, lobbied the company to move there–an offer labeled “economic cannibalism.”

On the western fringes, Wayne County Executive Robert Ficano–whose jurisdiction includes Detroit and an additional million people–is plotting a whole new city of sorts out by the airport. Ficano swears his “aerotropolis” will one day create 64,000 jobs as the regional equivalent of the Research Triangle Park. So far, it appears to be working–A123 is building a battery factory there, and GE is planning a $100 million R&D center with more than a thousand engineers hired at six-figure salaries.

But Detroit possesses a scarce resource its suburbs and airport do not: density. Developing the city’s edges while tilling its core isn’t sustainable in any way that counts. As David Owen argued last year in Green Metropolis, the surest, most efficient and self-sustaining way to reduce carbon emissions while preserving green space is to increase density. And Detroit offers one of the very few opportunities in the country, if not the world, to literally plug-and-play.

“A Martian developer landing in the metro area would immediately peg inner-city Detroit as the place to build,” writes Boisvert in the The Baffler. “Unlike a cornfield, it’s ready to support housing and businesses with a transportation grid, utilities, and municipal services. The prairie is not actually a prairie, just vacant lots ready to be built upon.”

While well-meaning, Hantz’s plans for agricultural autarky are misguided. The lack of fresh produce in inner-city Detroit–not to mention the absence of supermarket chains –has more to do with crushing poverty than logistics. Self-sufficiency isn’t possible anyway; even with his hydroponic greenhouses, there simply isn’t enough land for cities to support themselves. And his requests for tax breaks and subsidies divert attention and resources away from the real work of creating new industries for the region’s inhabitants.

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With 95% of its remaining buildings still inhabitable, inner-city Detroit should at least be an urban petri dish. As Jane Jacobs predicted way back in 1969–after the race riots but before Toyota–the city reached an evolutionary dead end as soon as it became an automotive monoculture. Its survival depends on restarting what Jacobs identified as the “creative inefficiency of the growth industry’s suppliers, the opportunities of able workers to break away, the inefficient but creative use of capital,” none of which will be well-served by either shrinking the city’s footprint or growing vegetables.

Unfortunately, Detroit has always had a weakness for urban renewal fads, whether the Renaissance Center or the infinite loop of the People Mover, which Ed Glaeser ridicules “as the silliest of all pieces of urban infrastructure. The farce of that rail-to-nowhere is tragic because the money spent building and maintaining the monorail could have been spent on Detroit’s children.”

But Detroit still has an excess of talent purged by the Big Three. Their skills are better suited to designing windmills than farming. GE acknowledged as much when it announced its R&D center–it’s coming to town to pick the brains of discarded engineers. Maybe the real shame is that no one seems willing to invest in Detroit besides GE and Chinese automakers.

Greg Lindsay is the co-author of Aerotropolis, with John D. Kasarda, to published in February 2011 by Farrar, Straus and Giroux.